Training needs to bring good returns

Simon Nathan

In an open letter to national newspapers, leading employers - including General Richard Lambert, the CBI director - argued that investment in human capital would be central to building a road out of recession. They wrote: "When markets are shrinking and order books falling, it is their (employees') commitment, productivity and ability to add value that will keep us competitive."

Employers know that investing in training will improve staff morale and add to business bottom line. But in tough times, employers will be evaluating their decisions more carefully. They will want to know that the time and money they put into training will deliver productivity and business advantage. Like all their investments, they will want to see a return.

Skills development will mean firms remain competitive today, but also that they are well placed to drive forward when the upturn comes. Achieving this will require partnership between business, government and providers.

Business invests Pounds 39 billion per year on workforce training, far outstripping the public purse. But the role of government, and its flagship Train to Gain programme, is vital in providing many employers with the support needed to raise skills. And as the downturn deepens this support will become ever more important.

The Government has made a good start by providing SMEs with a Pounds 350 million package of flexibilities under Train to Gain - flexibilities that the Government should now consider extending to all firms.

Employers have welcomed the support provided by Train to Gain over the past two years - with funding and brokerage offered under a "demand-led" umbrella. But a recent Ofsted report found that not enough employers were coming forward to take the Train to Gain offer. The reasons identified were those heard in the business community - Train to Gain was not funding enough level 3 qualifications, or the criteria prevented support for part- qualifications and those employees wanting to gain a second level 2 qualification in a more business relevant discipline.

That is why the recent SME announcement was so important - because it started to address these business concerns. Building on the sector compacts, funding for second level 2 qualifications will help employers compete in the downturn and to keep staff on board.

Funding for units of training will allow firms to choose training most relevant for them, and as the Qualifications and Credit Framework moves forward this should become more prevalent.

There is more that could be done. Train to Gain supports those in employment, but should also now be focusing on supporting training to prevent employees falling into unemployment. And with the business climate changing almost daily, firms should not be prevented from gaining prompt access to Train to Gain funding.

Now is also the time for employers to build on the relations they already have with colleges and training providers. And for providers it is an opportunity to strengthen their relationships with business.

We must endeavour to learn from the countless examples of businesses and colleges that have successfully worked together. The CBI will publish a report in the New Year, containing a wealth of case studies, with the support of the Learning and Skills Improvement Service.

Employers should do their best to help colleges understand ongoing changes in business needs. Language also matters. Colleges should try to talk to employers in terms that they understand, as few employers will be familiar with the highways and byways of the education sector. None of this will be easy, and getting it right will require much patience and flexibility from colleges and employers.

Simon Nathan, senior policy adviser, education and skills, CBI.

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